FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark one)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 31, 1998
------------------------------------------
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________________ to ____________________
001-13207
Commission file number 000-22827
DISCAS, INC.
................................................................................
(Exact name of small business issuer as specified in its charter)
DELAWARE 06-1175400
................................................................................
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
567-1 South Leonard Street, Waterbury, Connecticut 06708
................................................................................
(Address of principal executive offices) (Zip Code)
203-753-5147
................................................................................
(Issuer's telephone number)
................................................................................
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
l934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
|X| Yes |_| No
The number of shares outstanding of the issuer's single class of common
stock as of March 12, 1998 was 3,214,500.
Transitional Small Business Disclosure Format (check one)
|_| Yes |X| No
4
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
DISCAS, INC.
CONSOLIDATED BALANCE SHEET
January 31, April 30,
1998 1997
(unaudited) (audited)
ASSETS
Current assets:
Cash and equivalents $1,203,155 $ 173,100
Accounts receivable 842,335 1,244,554
Inventory 1,123,779 1,016,519
Prepaid expenses 90,864 15,599
---------- ----------
Total current assets 3,260,133 2,449,772
---------- ----------
Property and equipment (net) 2,299,900 1,846,615
Other assets 290,849 1,248,602
---------- ----------
$5,850,882 $5,544,989
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 812,141 $1,280,710
Accrued expenses 111,620 174,629
Line of credit 1,416,000 490,000
Current portion of capital leases 21,624 30,416
Current portion of long-term debt 163,258 383,069
---------- ----------
Total current liabilities 2,524,643 2,358,824
---------- ----------
Capital leases, excluding current portion 40,546 48,101
Other Long-term debt, excluding current portion 518,277 2,162,777
Related party loans 102,734 123,734
Stockholders' equity:
Common stock, par value $.0001 per share:
Authorized 20,000,000 shares
Outstanding 3,214,500 and 2,254,500 shares, respectively 321 225
Additional paid in capital 4,468,900 822,677
Retained earnings (accumulated deficit) (1,804,539) 28,651
---------- ----------
Total stockholders' equity 2,664,682 851,553
---------- ----------
$5,850,882 $5,544,989
========== ==========
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
DISCAS, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(unaudited)
Three months ended Nine months ended
January 31, January 31,
1998 1997 1998 1997
---------- ---------- ---------- ----------
Sales $1,167,937 $1,496,258 $4,543,904 $3,550,394
Cost of sales 1,246,223 1,162,188 3,926,209 2,735,613
--------- --------- --------- ---------
Gross Profit (loss) (78,286) 334,070 617,695 814,781
Selling, general and administrative expenses 811,052 341,874 1,874,113 761,454
--------- --------- --------- ---------
Income (loss) from operations (889,338) (7,804) (1,256,418) 53,327
Other expense:
Amortization of deferred financing costs - (87,000) (145,000) (87,000)
Interest expense, net (14,868) (33,940) (144,309) (73,790)
--------- --------- --------- ---------
Net other expense (14,868) (120,940) (289,309) (160,790)
Minority interest - - - 36,705
Loss before extraordinary item (904,206) (128,744) (1,545,727) (70,758)
Extraordinary item - loss on extinguishment of (287,463) -
--------- --------- --------- ---------
debt - -
- -
Net loss $(904,206) $(128,744) $(1,833,190) $(70,758)
========== ========== ============ =========
Average number of shares outstanding 3,288,750 2,328,750 2,961,214 2,171,705
========= ========= ========= =========
Net loss per share - basic and diluted
Loss before extraordinary item $(.27) $(.08) $(.52) $(.03)
Extraordinary item - loss on extinguishment of debt - - (.10) -
------ ------ ------ ------
Net loss $(.27) $(.08) $(.62) $(.03)
====== ====== ====== ======
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(unaudited)
Additional Retained earnings
Number Common paid-in (accumulated
of shares stock capital deficit) Total
April 30, 1997 2,254,500 $225 $822,677 $28,651 $851,553
Net loss - - - (1,833,190) (1,833,190)
Sale of common stock
and warrants 800,000 80 2,638,365 - 2,638,445
Sale of underwriter over
allotment warrants - - 7,874 - 7,874
Issuance of common stock for
convertible promissory note 160,000 16 999,984 - 1,000,000
--------- ---- ---------- ------------ ----------
January 31, 1998 3,214,500 $321 $4,468,900 $(1,804,539) $2,664,682
========= ==== ========== ============ ==========
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
DISCAS, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited)
Nine months ended
January 31,
1998 1997
---------- ----------
Cash flows from operating activities:
Cash received from customers $4,946,123 $3,070,558
Cash paid to suppliers and employees (6,245,685) (2,989,261)
Interest paid (144,309) (73,790)
---------- ----------
Net cash provided (used) by operating activities (1,443,871) 7,507
---------- ----------
Cash flows from investing activities:
Payment on other assets - (35,604)
Purchases of fixed assets (729,266) (84,573)
---------- ----------
Net cash used by investing activities (729,266) (120,177)
---------- ----------
Cash flows from financing activities:
Net proceeds from offering of stock 3,178,850 -
Principal payments on long-term debt (885,311) (84,091)
Proceeds from long-term debt - 375,000
Principal payments on capital leases (16,347) (25,450)
Proceeds from credit line 926,000 -
Payments of offering costs - (303,726)
---------- ----------
Net cash provided by financing activities 3,203,192 (38,267)
---------- ----------
Net increase (decrease) in cash 1,030,055 (150,937)
Cash and equivalents at beginning of period 173,100 183,546
---------- ----------
Cash and equivalents at end of period $1,203,155 $ 32,609
========== ==========
Reconciliation of net loss to cash provided (used) by
operating activities:
Net loss $(1,833,190) $ (70,758)
------------ ------------
Items which did not (provide) use cash:
Depreciation and amortization 321,407 116,937
Minority interest - (36,705)
Amortization of deferred financing costs 145,000 87,000
Extraordinary item 287,463 -
Working capital changes which provided (used) cash:
Accounts receivable 402,219 (479,836)
Inventory (107,260) (331,730)
Other assets (52,667) (32,985)
Prepaid expenses (75,265) 7,103
Accounts payable (468,569) 688,291
Accrued expenses (63,009) 60,190
------------ ------------
Net cash provided (used) by operating activities $(1,443,871) $ 7,507
============ ============
Schedule of non-cash investing and financing activities:
Financed acquisitions $ - $1,500,000
========== ==========
Acquisition of minority interest $ - $ 172,402
========== ==========
Deferred financing costs $ - $ 608,500
========== ==========
Exchange of convertible debt for stock $1,000,000 $ -
========== ==========
Other $ 34,593 $ -
========== ==========
PART I - FINANCIAL INFORMATION
DISCAS, INC.
January 31, 1998
Item 1. Financial Statements - Notes
1. Basis of presentation
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with the instructions to Form 10-QSB and in the opinion
of the Company include all adjustments necessary to present fairly the results
of operations, financial position and changes in cash flow.
The results of operations for the interim periods are not necessarily indicative
of the results expected for the full year.
2. Inventories
Inventories consist of the following:
January 31, 1998 April 30, 1997
---------------- --------------
Finished goods $ 416,245 $ 212,148
Raw materials and supplies 707,534 804,371
---------- ----------
$1,123,779 $1,016,519
---------- ----------
3. Property and equipment
Property and equipment consist of the following:
January 31, 1998 April 30, 1997
---------------- --------------
Machinery and equipment $3,129,813 $2,436,533
Leasehold improvements 65,635 63,843
Office equipment 132,261 68,402
Vehicles 64,555 58,206
Furniture and fixtures 20,677 22,098
---------- ----------
Total property and equipment 3,412,941 2,649,082
Less: accumulated depreciation 1,113,041 802,467
---------- ----------
Net property and equipment $2,299,900 $1,846,615
========== ==========
4. Prepaid expenses
Prepaid expenses consist of the following:
January 31, 1998 April 30, 1997
---------------- --------------
Consulting agreements $67,530 $ -
Rent 23,334 -
Other - 15,599
------- -------
$90,864 $15,599
======= =======
PART I - FINANCIAL INFORMATION
DISCAS, INC.
January 31, 1998
Item 1. Financial Statements - Notes (Cont'd)
5. Other assets
Other assets consist of the following:
January 31, 1998 April 30, 1997
---------------- --------------
Deferred offering costs $ - $ 532,148
Deferred financing costs, net - 432,463
Goodwill, net 204,872 216,077
Security deposits 34,494 32,310
Other 51,483 35,604
-------- ----------
$290,847 $1,248,602
======== ==========
6. Stock option plan
In November 1997, the Company issued 66,000 stock options to certain employees
pursuant to its stock option plan. The option price is $4.125 per share, the
fair market value on date of grant; the options vest over a four year period and
none are currently exercisable.
The Company applies APB Opinion 25 in accounting for its performance based stock
option plan. Accordingly, none of the estimated compensation cost of $33,000 has
been recognized for the plan for the nine months ended January 31, 1998. Had
compensation cost been determined on the basis of FASB Statement No. 123, the
impact on net loss and net loss per share would have been immaterial.
7. Economic dependency
In the nine month period ended January 31, 1998, two customers accounted for
approximately 27% of sales (15% and 12%, respectively); in the nine month period
ended January 31, 1997, two customers accounted for approximately 34% of sales.
8. Extraordinary item
The extraordinary loss of $287,463 resulted from the extinguishment of debt of
$375,000. The debt was issued in connection with a stockholder transaction in
the fiscal year ended April 30, 1997 as the Company was preparing for its
initial public offering.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
General
The Company produces proprietary plastic and rubber compounds using a variety of
recycled and prime (virgin) materials. The Company has extensive expertise in
polymer technology, and has commercialized proprietary formulations used in the
manufacturing of products in the footwear, aeronautic, military, automotive and
consumer products sectors. During November 1996, the Company acquired the assets
of a plastic container manufacturer in New Jersey, Christie Enterprises, Inc.
(the "Christie Acquisition").
Statements included in Management's Discussion and Analysis of Financial
Condition and Results of Operations which are not historical in nature, are
intended to be, and are hereby identified as "forward looking statements" for
purposes of the safe harbor provided by Section 21E of the Securities Exchange
Act of 1934, as amended. The Company cautions readers that forward looking
statements, including without limitation, those relating to the Company's future
business prospects, revenues, working capital, liquidity, capital needs,
interest costs, and income, are subject to certain risks and uncertainties,
certain of which are described herein, that could cause actual results to differ
materially from those indicated in the forward looking statements.
The Company's fiscal quarter ended January 31, 1998 produced severely depressed
results because of the continuing negative supply/demand relationship in the
polypropylene industry which has been caused, in part, by both the economic
conditions in Asia and reduced prices for crude oil. The oversupply of
polypropylene material continues to reduce margins as product selling prices are
depressed. In some instances, the Company has elected to reject potential sales
of its recycled products because the product market price has dipped below
variable production costs of such material. As disclosed in the previous
quarterly report filed for the fiscal quarter ended October 31, 1997, the
Company implemented certain steps to position it to withstand the current market
downturn. The actions taken, and their current status, are as follows:
o A manufacturing operation has been established in Statesville, North
Carolina. Product manufacturing commenced in January and the Company
expects that it will be capable of producing at maximum capacity by the end
of March 1998. The amount of actual production will be dictated by market
demand and product pricing; however, the Company does now have access to
lower cost raw material and has eliminated bottlenecks and some
transportation costs incurred in the preprocessing of feedstocks.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations (Cont'd)
o Over the next 18 months, the Company expects to vertically integrate the
Statesville operation to include the manufacture, warehousing and
distribution of plastic end-user products for the Company's customers
located in the Southeast. The pace at which vertical integration will be
implemented will be impacted by actual product demand and pricing, as well
as the Company's working capital position.
o In November 1997 and February 1998, the Company acquired a nursery
container product line and equipment to produce traffic safety devices used
by municipalities, utilities and commercial establishments. The Company
also completed an exclusive agreement to market products manufactured from
these newly acquired molds. The Company believes these assets were acquired
at below market prices due to both industry problems and industry
consolidation. These acquisitions will provide opportunities for expanding
both the Company's customer base and production of end user products at its
Kenilworth, New Jersey injection molding manufacturing facility which is
utilizing feedstocks produced by the Company's plastics compounding
operations. These steps will allow the Company to accelerate its entry into
the manufacture of new end user products and also take advantage of the
oversupply of raw materials to lower costs. The Company believes it can
also penetrate the large traffic safety market and compete effectively. In
addition, the expanded product lines at its New Jersey plant and the
expected introduction of injection molding manufacturing lines at the North
Carolina plant will make the Company more cost competitive against blow
molding container manufacturers.
o The Company has diversified its Waterbury location into providing toll
processing services to two major polymer manufacturers. In addition, the
Company has instituted a reduction in work force at this facility in order
to balance plant operating costs with its manufacturing and services
margins.
o The Company has signed marketing agreements to expand sales coverage for
Reprean compounds, horticultural containers and other molded products.
The Company has made significant investments in attractively priced business
assets which should help establish the Company as a long-term player in the
plastics recycling and manufacturing industry even though the costs associated
with such investments have adversely impacted short-term operating results.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations (Cont'd)
Such completed actions, and possible acquisitions which may be undertaken in the
future, could in themselves have adverse effects on the Company's performance.
Acquisitions also have the effect of utilizing the Company's cash resources for
acquisition costs and working capital, which removes such cash resources from
availability for other purposes in the future.
As disclosed in the Company's October 31, 1997 quarterly report, the oversupply
of virgin plastic raw material has been experienced before; however, this cycle
has been unusually severe. Although a turnaround is expected, the date of the
turnaround cannot be predicted with certainty. The Company believes that it has
the facilities to capitalize on any improvement in market conditions. However,
the Company's working capital position continues to erode and operating losses
such as those experienced in the quarter ended January 31, 1998 cannot be
sustained. Based on product sale activity in February and early March 1998, the
Company believes that product sales in the quarter ending April 30, 1998 will
exceed the sales levels in the quarter ended January 31, 1998. The sales
increases result from increased sales of the Company's nursery container and
other end user products. Traditionally, the months of March, April and May have
been the strongest for nursery container products. The Company cannot predict
with certainty that sales of nursery container and other end user products will
continue at current levels past May 1998.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations (Cont'd)
Results of Operations
Three Month Periods Ended January 31, 1998 and 1997
Sales decreased by $328,321, or approximately 21.9%, to $1,167,937 for the
quarter ended January 31, 1998, as compared to $1,496,258 for the quarter ended
January 31, 1997. The 1998 sales made by Christie Products amounted to $527,327
(compared to $571,601 for the quarter ended January 31, 1997) and other sales
amounted to $640,610 (compared to $924,657 for the quarter ended January 31,
1997). The current quarter is traditionally a low sales period for the Christie
operation while the other parts of the Company's operations have been adversely
impacted to a significant degree by the matters mentioned above. Sales to a
major Christie customer decreased during the quarter ended January 31, 1998 as
compared to 1997 ($139,047 as compared to $213,910) and in February, the
customer notified Christie that it was not expecting to buy Christie containers,
at least for the next several months. Although sales have been favorably
impacted by both new customers for Christie's growing containers and new end
user products, this customer loss will have a negative impact on formerly
expected sales levels for the fiscal quarter ending April 30, 1998.
Cost of goods sold increased by $84,035, or approximately 7.2%, to $1,246,223
for the quarter ended January 31, 1998, as compared to $1,162,188 for the
quarter ended January 31, 1997. Cost of goods sold as a percentage of sales was
106.7% for the quarter ended January 31, 1998, as compared to 77.7% in 1997. The
increase in cost of sales as a percent of sales is related to the margin
reduction in products sold because of the excess supply of virgin plastic raw
material (which also necessitated a $100,000 inventory write-down to market) and
has also been negatively impacted because significant expenditures had been made
to increase production capacity, including the hiring and training of personnel.
The Company has implemented programs to deal with the depressed market
conditions and many of its recent hires were part of the reduction in force
implemented in February at the Waterbury location. On an annualized basis, the
Company expects to reduce payroll and related costs by approximately $300,000 as
a result of employee layoffs. The Company also expects to make additional
expense reductions at the Waterbury and corporate headquarters facility until
the market imbalance referred to above has been corrected.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations (Cont'd)
The Company established the manufacturing facility in North Carolina because it
believes that in the long run, it must have a low cost production facility in
the Southeast; accordingly, the start-up costs associated therewith are included
in the results of operations for the quarter ended January 31, 1998.
The traditionally low sales at the Christie operation during the current quarter
further exacerbated the conditions that led to the unacceptable margins
experienced by the Company in the 1998 quarter as compared to the 1997 quarter.
Gross profit decreased by $412,356, or approximately 123.4%, to a loss of
$78,286 for the quarter ended January 31, 1998, as compared to a gross profit of
$334,070 for the quarter ended January 31, 1997. Such decrease is due to the
matters discussed above.
Selling, general and administrative costs increased by $469,178, or
approximately 137.2%, to $811,052 for the quarter ended January 31, 1998 as
compared to $341,874 for the quarter ended January 31, 1997. The increase is
attributable to the infrastructure built by the Company in terms of additional
personnel and related costs, travel and marketing expenses and additional
facilities costs to accommodate the Company's then expected sales growth.
Reductions in personnel costs have been instituted to counter the industry
downturn and further cost reductions will be implemented. The cost structure has
also been impacted by the legal, insurance, accounting and auditing and other
consulting costs associated with being a public company. Included in selling,
general and administrative costs is a $90,000 charge related to the January 1998
termination of a non-compete agreement with the former owner of Christie. This
was done to accommodate an extension of the lease for the Christie production
facilities. Further, provisions for uncollectable accounts have been made in
consideration of the depressed nature of the industry and the impact it may have
on the Company's customer base.
Operating loss increased by $881,534 to $889,338 for the current quarter as
compared to a loss of $7,804 for the quarter ended January 31, 1997.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations (Cont'd)
Deferred financing charges of $87,000 were amortized in the quarter ended
January 31, 1997 (none in the quarter ended January 31, 1998) and this noncash
charge is included in interest expense. The related debt was extinguished in
October 1997.
Net loss increased by $775,462 to $904,206 for the quarter ended January 31,
1998 as compared to $128,744 for the quarter ended January 31, 1997. The
industry downturn coupled with the costs incurred in building the Company's
infrastructure and production are the principal reasons for this loss. The
Company believes that operations may continue to be adversely impacted by market
conditions, but that steps have been and will continue to be implemented to
respond to the market.
Nine Month Periods Ended January 31, 1998 and 1997
Sales increased by $993,510, or approximately 28%, to $4,543,904 for the nine
month period ended January 31, 1998, as compared to $3,550,394 for the nine
month period ended January 31, 1997. The 1998 sales include $2,312,237 related
to the Christie Acquisition. In the nine months ended January 31, 1997, the
Company made sales to the Christie predecessor company of $423,782.
Cost of goods sold increased by $1,190,596, or approximately 43.5%, to
$3,926,209 for the nine month period ended January 31, 1998, compared to
$2,735,613 for the nine month period ended January 31, 1997. The increase in
cost of goods sold was attributable to increased sales volume, due to the
Christie Acquisition. Cost of goods sold as a percentage of sales was 86.4% for
the nine month period ended January 31, 1998 as compared to 77.1% in 1997. Cost
of sales as a percent of sales increased because of excess supplies of virgin
plastic raw materials and its pressure on selling prices and the corresponding
sales levels as described above.
Gross profit decreased by $197,086, or approximately 24.2%, to $617,695 for the
nine month period ended January 31, 1998, as compared to $814,781 for the nine
month period ended January 31, 1997. Such decrease was primarily attributable to
the negative effect of the excess in virgin raw material supplies, and its
impact on product selling prices and gross margins.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations (Cont'd)
Selling, general and administrative costs increased by $1,112,659, or
approximately 146.1%, to $1,874,113 for the nine month period ended January 31,
1998 as compared to $761,454 for the nine month period ended January 31, 1997.
The increase is attributable to infrastructure built by the Company in terms of
additional personnel and related costs, travel and marketing expenses and
additional facilities costs to accommodate the Company's then expected sales
growth. Reduction in personnel costs have been instituted to counter the
industry's downturn and further cost reductions will be implemented. The cost
structure has also been impacted by the legal, insurance, accounting and
auditing and other consulting costs associated with being a public company.
Operating income decreased by $1,309,745 to a loss of $1,256,418 for the current
nine month period ended January 31, 1998 as compared to income of $53,327 for
the nine month period ended January 31, 1997.
Deferred financing charges of $145,000 were amortized in the nine month period
ended January 31, 1998 ($87,000 in fiscal 1997) and this noncash charge is
included in interest expense. In addition, the related debt was extinguished in
October 1997 and the remaining unamortized deferred financing charges ($287,463)
were expensed.
Net loss increased by $1,762,432 to $1,833,190 for the nine month period ended
January 31, 1998 as compared to a loss of $70,758 for the nine month period
ended January 31, 1997. The increase was primarily attributable to the raw
material supply imbalance mentioned above, the increase in selling, general and
administrative costs and to the amortization of deferred financing charges and
other interest costs incurred to pursue the implementation of the Company's
growth strategy. For the reasons stated above, the growth strategy has been
discontinued; the strategy will not be revisited until there is significant
improvement in industry and market conditions.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations (Cont'd)
Liquidity and Capital Resources
Financial Condition
Because the raw material imbalance and pricing pressures described above were so
severe during the quarter ended January 31, 1998 and the Company acquired
approximately $729,000 of property and equipment, the Company's working capital
position has eroded to a significant degree. Cash and cash equivalents decreased
from $1,759,267 at October 31, 1997 to $1,203,155 at January 31, 1998, or by
$556,112. Working capital decreased from $3,105,254 to $735,490, or $2,369,764
during the same period. The Company has implemented stringent cash management
procedures to conserve cash during this current market downturn. If these
conditions continue, the Company will exhaust its available cash before the end
of its 1999 fiscal year and will require additional working capital.
The Company is also in violation of certain financial covenants under its debt
agreement with a commercial bank. The Company and the bank are in the process of
restructuring the agreement. The Company cannot predict what impact the
restructuring will have on its operations and access to working capital.
The Company has made some strategic investments in the acquisition of
attractively priced operating assets and has expanded production capacity. As
the raw material supply imbalance is corrected, the Company will be in a
position to respond quickly and effectively to improved market conditions. The
Company expects the polypropylene market conditions to improve in its fiscal
year beginning May 1, 1998; however, the timing and degree of such improvement
cannot be predicted with certainty.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 27 - Financial Data Schedule (EDGAR filing only).
(b) Reports on Form 8-K
On November 4, 1997, the Company filed a Current Report on Form 8-K,
Item 2, to report the acquisition of the operating assets of the AKD Division of
Ash-Kourt Fabrics, Inc. and the establishment of a manufacturing operation in
Statesville, North Carolina. The Company also reported the acquisition of the
nursery container product line of Union Products, Inc.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized:
DISCAS, INC.
Registrant
Date: March 16, 1998 By /s/ Ronald P. Pettirossi
------------------------------
Ronald P. Pettirossi
Chief Financial Officer